Federal, Oversight, Regulation

House subcommittee reviews HUD’s efforts to reduce fraud, waste, abuse

Department of Housing and Urban DevelopmentThe House Financial Services Oversight and Investigations Subcommittee questioned Department of Housing and Urban Development Inspector General David A. Montoya about the agency’s efforts to reduce fraud, waste and abuse.

The subcommittee reviewed the agency’s most recent report, which identified more than $770 million in questionable costs and put forth recommendations to better utilize nearly $740 million in HUD funds.

During the hearing the subcommittee found that HUD’s biggest programs—including disaster relief and the Community Development Block Program—lack oversight and are vulnerable to abuse and waste.

“Over the years, HUD has failed to adequately account for how taxpayer funds are being spent in the CDBG program, leading to wasteful spending on frivolous pork barrel projects,” Subcommittee Chairman Patrick McHenry said. “Although one of the three national program objectives for CDBG is that projects principally benefit low and moderate-income persons, critics have noted that CDBG funds often end up being used for parks, pools, street signs, and community centers, diverting dollars from those communities with the greatest need, particularly housing.”

The CDBG program is the largest source of federal assistance for state and local neighborhood revitalization projects, housing rehabilitation and economic activities.

In its oversight plan, the full House Financial Services Committee voiced concern about the use of CDBG funds and committed to analyze how grant recipients use program funds in order to ensure they are spent properly.

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